Press Release Details

Home Home  >  Investors  >  Press Releases  >  Press Release Details
View all Press Releases

Chico's FAS, Inc. Announces First Quarter E.P.S. of $0.08 Net of Non-Cash Charges of $0.03

05/27/2009
-- Quarter-end inventories decreased 13% per selling square foot --- Cash and marketable securities were $325.0 million at quarter-end
FORT MYERS, Fla., May 27, 2009 /PRNewswire-FirstCall via COMTEX/ -- Chico's FAS, Inc. (NYSE: CHS) today announced its financial results for the fiscal 2009 first quarter ended May 2, 2009.

(Logo: http://www.newscom.com/cgi-bin/prnh/20080211/CHICOSLOGO)

Fiscal 2009 First Quarter Financial Results

For the first quarter ended May 2, 2009, the Company had net income of $14.5 million or $0.08 per diluted share, compared to net income of $12.7 million, or $0.07 per diluted share in the prior year's first quarter ended May 3, 2008.

The first quarter 2009 results include non-cash impairment charges totaling approximately $5.1 million, net of tax, or $0.03 per diluted share, related to the write-off of development costs for software applications that reflect the Company's recent decision to deploy alternative inventory planning and allocation software.

Excluding these charges, the Company's first quarter net income approximated $19.6 million, or $0.11 per diluted share compared to net income of $12.7 million, or $0.07 per diluted share for the like period last year. The higher net income was primarily a result of a higher gross margin combined with lower selling, general and administrative expenses, partially offset by lower interest income and higher income taxes.

Sales

Net sales for the thirteen-week period ended May 2, 2009 increased from $409.6 million to $410.6 million. Consolidated comparable store sales decreased 3.2% for the thirteen-week period ended May 2, 2009 compared to the 17.5% decrease for the like period last year ended May 3, 2008. The Chico's brand's same store sales decreased approximately 6% and the White House | Black Market (WH|BM) brand's same store sales increased approximately 4%. Direct-to-consumer sales, not included in comparable store sales, increased 37.1% over first quarter 2008.

Gross Margin

Gross margin for the fiscal 2009 first quarter increased from $228.8 million to $233.4 million. Expressed as a percentage of net sales, gross margin for the first quarter increased 90 basis points to 56.8% from 55.9% in the prior year's first quarter. The increase in gross margin was due to lower markdowns in the Chico's brand and improved margin at Chico's outlet stores. The improvement in gross margin was slightly offset by a decrease in the WH|BM brand merchandise margin as a result of higher markdowns in the current quarter compared to the same period last year.

Selling, General and Administrative Expenses

Selling, general and administrative expenses ("SG&A") for the fiscal 2009 first quarter decreased from $212.1 million in the prior period to $211.6 million in the current period. Expressed as a percentage of net sales, SG&A in the current quarter decreased by approximately 30 basis points compared to the prior period primarily as the result of cost reduction strategies. The efforts to decrease the Company's expense structure were offset by the recognition of pre-tax impairment charges on software approximating $8.1 million. Excluding these charges, SG&A expense would have decreased by $8.5 million, or 220 basis points, compared to the like period last year.

Store operating expenses for the fiscal 2009 first quarter decreased by $0.8 million primarily as a result of ongoing store-level cost reduction initiatives.

Marketing costs for the first quarter fiscal 2009 decreased by $5.0 million primarily as a result of the ongoing cost reduction initiatives and reduced print advertising in the first quarter of fiscal 2009 versus the first quarter of fiscal 2008.

Shared services, including headquarters and other non-brand specific expenses, for the 2009 first quarter decreased by $2.7 million mainly as a result of the Company's continued rationalization of its corporate expense structure.

Inventories

Consolidated inventory per selling square foot at the end of the 2009 first quarter was $56, reflecting a decrease of approximately 13% from $65 at the end of the prior year's first quarter. Quarter-ended inventory for the Chico's brand decreased approximately 18%, from the prior year's first quarter. Quarter-ended inventory for the WH|BM brand increased approximately 4% per selling square foot and includes $5.3 million of incremental inventory in-transit over the prior period. Excluding the incremental inventory in-transit, WH|BM inventory would have been down approximately 9% per selling square foot.

Cash and Marketable Securities

Cash and marketable securities at the end of the fiscal 2009 first quarter totaled $325.0 million, reflecting an approximate $56 million increase over the prior fiscal year-end. Cash flows from operating activities increased by $32.6 million when compared to the prior fiscal year's first quarter resulting from an increase in accounts payables including increased levels of inventory in-transit. Additionally, the Company expended $12.7 million in capital expenditures for the current quarter vs. $40.1 million for the same period last year.

ABOUT CHICO'S FAS, INC.

The Company is a women's specialty retailer of private branded, sophisticated, casual-to-dressy clothing, intimates, complementary accessories, and other non-clothing gift items. The Company operates 1,069 specialty stores, including stores in 48 states, the District of Columbia, the U.S. Virgin Islands and Puerto Rico.

The Chico's brand currently operates 614 boutique and 40 outlet stores, publishes a catalog during key shopping periods throughout the year, and conducts e-commerce at www.chicos.com.

White House | Black Market currently operates 326 boutique and 16 outlet stores, publishes a catalog highlighting its latest fashions and conducts e-commerce at www.whitehouseblackmarket.com.

Soma Intimates is the Company's developing concept with 72 boutique stores and 1 outlet store today. Soma also publishes a popular catalog for its customers and conducts e-commerce at www.soma.com.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Certain statements contained herein, including without limitation, statements addressing the beliefs, plans, objectives, estimates or expectations of the Company or future results or events constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements involve known or unknown risks, including, but not limited to, general economic and business conditions, and conditions in the specialty retail industry. There can be no assurance that the actual future results, performance, or achievements expressed or implied by such forward-looking statements will occur. Users of forward-looking statements are encouraged to review the Company's latest annual report on Form 10-K, its filings on Form 10-Q, management's discussion and analysis in the Company's latest annual report to stockholders, the Company's filings on Form 8-K, and other federal securities law filings for a description of other important factors that may affect the Company's business, results of operations and financial condition. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that projected results expressed or implied in such statements will not be realized.

For more detailed information on Chico's FAS, Inc., please go to our corporate website, www.chicosfas.com.

(Financial Tables Follow)

                                  Chico's FAS, Inc.
                            Consolidated Balance Sheets
                                   (in thousands)

                                                      May 2,       January 31,
                                                       2009           2009
                                                    (Unaudited)
                                          ASSETS
    Current Assets:
         Cash and cash equivalents                 $   95,394    $   26,549
         Marketable securities, at market             229,585       242,153
         Receivables                                   31,387        33,993
         Income tax receivable                          1,055        11,706
         Inventories                                  145,777       132,413
         Prepaid expenses                              24,250        21,702
         Deferred taxes                                16,807        17,859
                                                       ------        ------
              Total Current Assets                    544,255       486,375

    Property and Equipment:
         Land and land improvements                    18,763        18,627
         Building and building improvements            74,562        74,998
         Equipment, furniture and fixtures            376,827       376,218
         Leasehold improvements                       417,427       418,691
                                                      -------       -------
              Total Property and Equipment            887,579       888,534
         Less accumulated depreciation and
          amortization                               (347,764)     (327,989)
                                                      -------       -------
              Property and Equipment, Net             539,815       560,545

    Other Assets:
         Goodwill                                      96,774        96,774
         Other intangible assets                       38,930        38,930
         Deferred taxes                                36,304        38,458
         Other assets, net                              4,757         5,101
                                                        -----         -----
              Total Other Assets                      176,765       179,263
                                                      -------       -------
                                                   $1,260,835    $1,226,183
                                                    =========     =========


                           LIABILITIES AND STOCKHOLDERS' EQUITY
    Current Liabilities:
         Accounts payable                          $   69,114    $   56,542
         Accrued liabilities                          102,160        88,446
         Current portion of deferred liabilities        1,917         1,748
                                                      -------       -------
              Total Current Liabilities               173,191       146,736

    Noncurrent Liabilities:
         Deferred liabilities                         172,108       177,251

    Stockholders' Equity:
         Common stock                                   1,773         1,771
         Additional paid-in capital                   257,247       258,312
         Retained earnings                            656,467       641,978
         Other accumulated comprehensive income            49           135
                                                      -------       -------
            Total Stockholders' Equity                915,536       902,196
                                                      -------       -------
                                                   $1,260,835    $1,226,183
                                                    =========     =========


                                   Chico's FAS, Inc.
                         Consolidated Statements of Operations
                                      (Unaudited)
                        (in thousands, except per share amounts)

                                              Thirteen Weeks Ended
                                             -----------------------
                                          May 2, 2009          May 3, 2008
                                         ----------------------------------
                                      Amount        % of     Amount    % of
                                                    Sales              Sales
                                     --------      -------  --------  -------

    Net sales by Chico's/Soma
     stores                        $  272,506        66.4  $ 285,694    69.8
    Net sales by White House |
     Black Market stores              116,168        28.3    107,849    26.3
    Net sales by
     direct-to-consumer                21,969         5.3     16,021     3.9
                                     --------      -------   --------  -------
        Net sales                     410,643       100.0    409,564   100.0

    Cost of goods sold                177,255        43.2    180,762    44.1
                                     --------      -------   --------  -------
        Gross margin                  233,388        56.8    228,802    55.9

    Selling, general and
     administrative expenses:
    Store operating expenses          160,195        39.0    160,985    39.3
    Marketing                          17,834         4.3     22,843     5.6
    Shared services                    25,534         6.2     28,281     6.9
    Impairment charges                  8,058         2.0          -       -
                                     --------      -------   --------  -------
        Total selling, general and
         administrative expenses      211,621        51.5    212,109    51.8
                                     --------      -------   --------  -------
        Income from operations         21,767         5.3     16,693     4.1

    Interest income, net                1,022         0.2      2,239     0.5
                                     --------      -------   --------  -------
        Income before income taxes     22,789         5.5     18,932     4.6

    Income tax provision                8,300         2.0      6,200     1.5
                                     --------      -------   --------  -------
        Net income                 $   14,489         3.5  $  12,732     3.1
                                   ==========      =======   ========  =======
        Per share data:
    Net income per common
     share-basic                   $     0.08              $    0.07
                                   ==========              =========
    Net income per common and
     common equivalent
     share-diluted                 $     0.08              $    0.07
                                   ==========              =========
    Weighted average common
     shares outstanding-basic         177,221                176,368
                                   ==========              =========
    Weighted average common and
     common equivalent shares
     outstanding-diluted              177,692                176,551
                                   ==========              =========


                                Chico's FAS, Inc.
                         Consolidated Cash Flow Statements
                                  (Unaudited)
                                 (in thousands)

                                                  Thirteen Weeks Ended
                                                  --------------------
                                                  May 2,          May 3,
                                                  2009            2008
                                                -------         -------
    CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                  $14,489         $12,732
                                                -------         -------
    Adjustments to reconcile net income to
      net cash provided by operating
      activities --
      Depreciation and amortization, cost
       of goods sold                              1,645           2,700
      Depreciation and amortization, other       22,986          23,517
      Deferred tax expense (benefit)              3,206          (4,402)
      Stock-based compensation expense, cost
       of goods sold                                702           1,008
      Stock-based compensation expense, other     1,427           2,129
      Excess tax benefit from stock-based
       compensation                                   -            (100)
      Impairment of long-lived assets             8,058               -
      Deferred rent expense, net                    632           2,417
      Loss on disposal of property and equipment    750               9
    Decrease (increase) in assets -
      Receivables, net                            2,606          (3,104)
      Income tax receivable                      10,651          23,973
      Inventories                               (13,364)        (16,999)
      Prepaid expenses and other                 (2,204)         (1,245)
    Increase (decrease) in liabilities -
      Accounts payable                           12,572         (19,229)
      Accrued and other deferred liabilities      4,848          13,001
                                                -------         -------
        Total adjustments                        54,515          23,675
                                                -------         -------
        Net cash provided by operating
         activities                              69,004          36,407
                                                -------         -------
    CASH FLOWS FROM INVESTING ACTIVITIES:
      Sales of marketable securities, net        12,482          26,717
      Purchases of property and equipment       (12,709)        (40,063)
                                                -------         -------
        Net cash used in investing activities      (227)        (13,346)
                                                -------         -------
    CASH FLOWS FROM FINANCING ACTIVITIES:
      Proceeds from issuance of common stock        138             163
      Excess tax benefit from stock-based
       compensation                                   -             100
      Repurchase of common stock                    (70)           (103)
                                                -------         -------
        Net cash provided by financing activities    68             160
                                                -------         -------
        Net increase in cash and cash
         equivalents                             68,845          23,221
    CASH AND CASH EQUIVALENTS, Beginning of
     period                                      26,549          13,801
                                                -------         -------
    CASH AND CASH EQUIVALENTS, End of period    $95,394         $37,022
                                                =======         =======

SEC Regulation G - The Company reports its consolidated financial results in accordance with generally accepted accounting principles (GAAP). However, to supplement these consolidated financial results, management believes that certain non-GAAP operating results, which exclude impairment and certain other non-recurring charges, may provide a more meaningful measure on which to compare the Company's results of operations between periods. The Company believes these non-GAAP results provide useful information to both management and investors by excluding certain expenses that impact the comparability of the results. A reconciliation of first quarter 2009 earnings per diluted share on a GAAP basis to earnings per share on a non-GAAP basis is presented in the table below:

                            Chico's FAS, Inc.
                      Non-GAAP to GAAP Reconciliation
                      Diluted Earnings Per Share (EPS)

                                                13 weeks ended
                                                 May 2, 2009
                                               ----------------
    Diluted EPS on a GAAP basis (as reported)       $0.08
    Add: Impact of impairment of long-lived
     assets                                          0.03
                                                    -----
    Non-GAAP Diluted EPS                            $0.11
                                                    =====

Executive Contact:
Robert C. Atkinson
Vice President - Investor Relations
Chico's FAS, Inc.
(239) 274-4199

SOURCE Chico's FAS, Inc.


http://www.chicosfas.com

Categories: Press Releases
View all Press Releases

Investor Contact

  • David M. Oliver

  • Senior Vice President, Finance - Controller
  • cfo@chicos.com